New Swiss Re report reveals a sharp decline in global insured losses in 2019

GLOBAL – World’s second largest reinsurer, Swiss Reinsurance Company (Swiss Re) has revealed that global insured losses from natural catastrophes fell to US$50 billion in 2019 from $84 billion in 2018.

The Swiss Re Group disclosed this in its report on the 2019 global catastrophies.

The reinsurer further noted that insured losses from man-made disasters declined to US$6 billion from US$9 billion.

Total economic losses from natural and man-made catastrophes fell to around US$140bn in 2019 from US$176bn in 2018, according to preliminary sigma estimates from Swiss Re Institute.

Global insured losses were estimated to be around $56bn, down from US$93 billion in 2018 and below the annual average ($75 billion) of the previous 10 years.

Tropical cyclone activity in the second half of 2019 pushed overall insurance losses higher after a benign first half of the year.

The report also noted that in recent years, a number of smaller and mid-sized loss-generating disaster events (so-called secondary perils) accounted for more than 50 per cent of the insured losses.

Globally, more than 11,000 people died or went missing in disaster events in 2019. Natural catastrophes accounted for $133bn of the year’s around $140bn in global economic losses. The report said the remaining $7 billion came from man-made disasters.

Tropical cyclones also inflicted devastation in different parts of the world.

In the first half of the year, cyclones Idai and Kenneth in Mozambique and neighboring countries, and Cyclone Fani in India, left trails of destruction and suffering to local communities.

The events claimed around 1 400 victims. The report however noted that insured claims were very low given the low insurance penetration in the impacted regions.

It stated that in the second half of 2019, the Bahamas and North Carolina in the US were hit by Hurricane Dorian, which caused insured losses of about US$4.5 billion.

Japan was hit by two devastating typhoons within a short period. In mid-September, Typhoon Faxai hit the Kanto region that includes the Greater Tokyo Area, with associated insured losses estimated to be approximately US$7 billion.

Soon after, in early October, Typhoon Hagibis struck the same region, causing further widespread damage across Japan.

Total insured losses from Hagibis were estimated to be around US$8 billion, Swiss Re stated.

After some years of relative calm, the experience of the last two years reaffirms that typhoon risk remained a major vulnerability for Japan.

Faxai and Hagibis followed Typhoon Jebi in 2018, which resulted in substantial insurance losses of close to US$13 billion.

The 2019’s typhoons further underscored the high exposure of urban regions in Japan to both typhoon wind and flood risks, despite of the presence of mitigation infrastructure.

While climate change could not be ruled out as an amplifying risk factor, it was certain that the last three events confirmed the historical pattern of devastating Japanese typhoons in the middle of the 20th century.

Last year also saw heatwaves and dry spells, with new temperature highs recorded in several locations around the world, from Europe to Australia.

Devastating wildfires affected Australia, Indonesia, the United States, Canada, the Amazon region and Siberia, among others.

There were devastating floods in many regions in 2019. Severe monsoon rains led to extensive flooding in India, Bangladesh and Nepal, and there were repeated flood events in other regions, such as China, the US, Europe, Canada and Australia.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.